Yahoo Finance DKS vs. TSCO: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Retail - Miscellaneous sector might want to consider either Dick's Sporting Goods (DKS) or Tractor Supply (TSCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, both Dick's Sporting Goods and Tractor Supply are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
DKS currently has a forward P/E ratio of 9.74, while TSCO has a forward P/E of 24.84. We also note that DKS has a PEG ratio of 0.76. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSCO currently has a PEG ratio of 2.70.
Another notable valuation metric for DKS is its P/B ratio of 3.71. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TSCO has a P/B of 11.78.
These are just a few of the metrics contributing to DKS's Value grade of A and TSCO's Value grade of C.
Both DKS and TSCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DKS is the superior value option right now.
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DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
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